Rise of the robots. But only up to a point...Rise of the robots. But only up to a point...

June 2016June 2016

The much-vaunted rise of the robots was a clear theme throughout this year's Fund Forum gathering, held in Berlin, increasingly seen as one of modern Europe's hippest cities.

But only up to a point. While the phrase robo-advice has quickly established itself in the industry's lexicon in reference to meeting the needs of large numbers of retail investors, it is not entirely accurate. Robo-processing is much nearer the truth, argues Mathieu Maurier, Global Head of Sales and Relationship Management at SGSS, one of a 15-strong SG Group contingent of delegates to Fund Forum 2016.

"Robots will not in fact be providing any kind of advice but will be used to channel the small savings of hundreds or thousands of individual investors – in particular members of the so-called Millennial Generation who have grown up with advanced technology as part of their DNA, and are familiar with 'gamification' and the possibilities of aggregation of resources. "Robo-advice will be active at the asset allocation stage, and then robo-processing will do the heavy lifting. This goes beyond anything we have seen before and it is going to be a major trend in the future."

This is one of the many strands in the passive investment tapestry which has become such a mainstay of conversation in the international asset management world and Fund Forum was no exception, says Mathieu Maurier. "Inflows to exchange-traded funds are increasing as pressure grows on costs at every point on the value chain." In this environment there will be even less room for inefficiencies going forward, he adds. "Asset managers need to reinvent themselves so that they remain viable, and part of this vital process is to ensure their supply chain is optimally efficient."

This helps explain the large financial technology presence at the Forum, suggests his colleague Stephen Doyle, Head of Institutional Sales, Asset managers and Insurers, UK and Ireland, at SGSS. "There were more FinTech providers than ever before, hoping to ally with asset servicing providers to offer combined solutions to the asset management community."

Other topics on the agenda of many of the 1300 or so investment managers and service providers in attendance at the Forum included the possibility of Brexit (British exit from the European Union). "Brexit was well covered," says Mathieu Maurier. "What will be its impact? What will be the implications for asset managers in the UK and continental Europe? It raised a host of questions but of course there are no hard factual answers at this stage. They will only begin to emerge if the British electorate votes on June 23 to leave the EU."

The search for yield remains part of the industry's staple diet, and it is clear that alternative assets such as private equity and real estate are the focus of increasing attention from institutional investors as they review their asset allocation processes. "A growing number will likely increasingly accept the illiquidity inherent in this asset class in return for the potential additional reward," says Mathieu Maurier. "As investment appetite in private equity and real estate rise, we might well see the emergence of new techniques to boost liquidity, further underpinning their attractions."

Mathieu Maurier Global Head of Sales and Relationship Management, SGSS

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The much-vaunted rise of the robots was a clear theme throughout this year's Fund Forum gathering, held in Berlin, increasingly seen as one of modern Europe's hippest cities.

But only up to a point. While the phrase robo-advice has quickly established itself in the industry's lexicon in reference to meeting the needs of large numbers of retail investors, it is not entirely accurate. Robo-processing is much nearer the truth, argues Mathieu Maurier, Global Head of Sales and Relationship Management at SGSS, one of a 15-strong SG Group contingent of delegates to Fund Forum 2016.

"Robots will not in fact be providing any kind of advice but will be used to channel the small savings of hundreds or thousands of individual investors – in particular members of the so-called Millennial Generation who have grown up with advanced technology as part of their DNA, and are familiar with 'gamification' and the possibilities of aggregation of resources. "Robo-advice will be active at the asset allocation stage, and then robo-processing will do the heavy lifting. This goes beyond anything we have seen before and it is going to be a major trend in the future."

This is one of the many strands in the passive investment tapestry which has become such a mainstay of conversation in the international asset management world and Fund Forum was no exception, says Mathieu Maurier. "Inflows to exchange-traded funds are increasing as pressure grows on costs at every point on the value chain." In this environment there will be even less room for inefficiencies going forward, he adds. "Asset managers need to reinvent themselves so that they remain viable, and part of this vital process is to ensure their supply chain is optimally efficient."

This helps explain the large financial technology presence at the Forum, suggests his colleague Stephen Doyle, Head of Institutional Sales, Asset managers and Insurers, UK and Ireland, at SGSS. "There were more FinTech providers than ever before, hoping to ally with asset servicing providers to offer combined solutions to the asset management community."

Other topics on the agenda of many of the 1300 or so investment managers and service providers in attendance at the Forum included the possibility of Brexit (British exit from the European Union). "Brexit was well covered," says Mathieu Maurier. "What will be its impact? What will be the implications for asset managers in the UK and continental Europe? It raised a host of questions but of course there are no hard factual answers at this stage. They will only begin to emerge if the British electorate votes on June 23 to leave the EU."

The search for yield remains part of the industry's staple diet, and it is clear that alternative assets such as private equity and real estate are the focus of increasing attention from institutional investors as they review their asset allocation processes. "A growing number will likely increasingly accept the illiquidity inherent in this asset class in return for the potential additional reward," says Mathieu Maurier. "As investment appetite in private equity and real estate rise, we might well see the emergence of new techniques to boost liquidity, further underpinning their attractions."

Mathieu Maurier Global Head of Sales and Relationship Management, SGSS